On 15 August, Zillow CEO Rich Barton came out and said the same thing your humble real estate professional has been saying since March: the coronavirus pandemic has initiated a permanent paradigm shift in the way Americans live and work. The real estate industry has responded to the pandemic just like every other industry, and, like others, its response is permanent. From air shafts in architectural designs mitigating spread of disease to suburban and ex-urban developments becoming more popular, every pandemic sends people away from cities. Not to say that this makes country life as accessible or enviable for all who would want to leave cities - perhaps it's just moving to an area with a lower cost of living & higher quality of life (closer to a favorite activity or family) - catastrophes always accelerate technological advances. Telecommuting is here to stay.
Don't fault major corporations for their market-sensitive positions in saying "We'll get back to normal real soon!" I watched my own company say to my face "Don't worry, the offices will open to the public soon enough, just be patient" while simultaneously sacking the receptionist. Corporations can be forgiven just like politicians for saying what people want to hear in order to avoid panic. But the savvy buyer is now following the wealthy buyer. A client living in the Upper West Side of Manhattan reported this week that even the most dilapidated barn in the suburban/rural areas of Northern Connecticut are being bought up like hot cakes while downtown brownstones are sitting vacant on the market for indefinite periods of time as buyers continue to balk at the idea of living in a congested area.
For those who are unable to buy a home until they sell their current home, which sits in the city centre, prices have dropped substantially to 1/3 of asking prices on penthouses in downtown areas. This lack of liquidity will increase the rental market in desirable mixed-use, pedestrian-friendly areas like North Raleigh. Perhaps even all those storage units built over the last decade might finally be filled by people moving in rather than holding on. While downtown apartments are, understandably, difficult to sell, a 40% drop in listings for suburban homes is starting to show the efficacy of a family having a family home to call their own. It is now the base of everything.
Jessica Mohr is a licensed real estate broker working in her hometown of Raleigh, North Carolina.